I ditched corporate America in 1994 and started a management consulting and venture capital firm (http://petercohan.com). I started following stocks in 1981 when I was in grad school at MIT and started analyzing tech stocks as a guest on CNBC in 1998. I became a Forbes contributor in April 2011. My 11th book is "Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision" (http://goo.gl/ygaUV). I also teach business strategy and entrepreneurship at Babson College in Wellesley, Mass.

NEW YORK, NY - OCTOBER 06: Darrel Carter, from New York, writes a note in remembrance to Steve Jobs, founder and former CEO of Apple Inc., outside the Apple Store on West 14th Street on October 6, 2011 in New York City. (Image credit: Getty Images via @daylife)

Apple (AAPL) is poised to report its first profit drop in a long time. This outcome brings into clearer focus the biggest challenge facing Apple’s board: Is Tim Cook the person for the CEO job and if not, who would be better?

About those falling earnings — Bloomberg reports that Apple is poised to report a 2% fall in net income for its first quarter to $12.8 billion, or $13.48 a share. With the exception of one quarter in 2003, Apple’s net income has increased at least 10% each quarter. And if that’s not bad enough, Apple is poised to report an 18% sales increase to $54.8 billion, “the slowest growth rate since 2009,” according to Bloomberg.

The good news for Apple is that people are still buying its products. Analysts estimate that it sold 48 million iPhones, 22.4 million iPads, and 5.1 million Macs according to Bloomberg.

But the bad news is that Apple’s core market of people willing to pay up for its products is fairly saturated. And the biggest untapped opportunity — emerging markets like China — are largely unwilling to pay a price premium.

Moreover, Apple is locked into a nasty legal battle with Samsung which happens to be a formidable competitor — offering 80 different smart phone models.

So if Apple wants to grow with its existing product line, an ongoing profit squeeze is inevitable. After all, Apple’s costs are rising as it pressures suppliers like Foxconn to improve working conditions — leading to higher wages and an increase in Apple’s unit costs.

At the same time, Apple will need to either sell a lower-priced version of its products to gain access to emerging markets or hold the line on prices and watch its market share go to Samsung and other competitors.

Such profit squeezes are an inevitable fate for high tech companies. And in the past, Apple has addressed them through innovation. More specifically, Apple developed an exceptionally well-designed and marketed product to take market share in a huge established market. Apple did this during the 2000s in the MP3 player, cell phone, and tablet markets.

But this strategy of creating big new revenue streams only worked under Steve Jobs. Then Jobs replaced himself with supply chain expert, Tim Cook. Although Cook has certainly suffered from supply chain problems — delays in meeting demand for new models and bad publicity due to worker death and injury at Apple suppliers — he has largely done a decent job of managing Apple’s supply chain.

But Cook has yet to demonstrate that he can create a big new revenue source. He has proven that he can oversee a botched new product introduction though — witness the six epic fails of Apple Maps. He can also fire people who take the blame for embarrassing him.

But can he do what Steve Jobs did so often — invent a new category-killing product? Since September 2012, Apple stock has lost $100 billion worth of its value, falling 29%. While nothing can make up for the loss that investors who bought at Apple’s peak price — perhaps investors should throw in the towel on Cook.

That seems to be what Apple’s board should do. But the problem is figuring out who could do a better job than Cook.

One person to consider is Jony Ive — Jobs’ product design partner. He was previously responsible for Apple hardware design and in December was promoted to be in charge of the look and feel of its software as well.

It’s unclear whether Ive has the skills to manage Apple, but the company’s competitive advantage has always been design — with supply chain playing an important, but secondary role.

Now it’s time for Apple’s board to put the person with design skill in the CEO job.

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Peter Cohan — can you confirm that is just a joke? I can’t imagine any intelligent person writing this and genuinely believing any of it. Hence I am – genuinely – wondering if it’s just a joke; some kind of test to see what page views it generates.

Great idea. Lets take the guy whose talent (supply chain management) probably takes up 1/3 of his day out of the CEO role and put the guy who needs huge chunks of deep think time in order to come up with new innovations into that highly distracting role. Makes me wonder whether the article author has any experience in the tech world. Probably not.

Wow! It’s like the rotten cherry on top of the cake of negative articles on AAPL. Shake those final shares loose before the quarterly report sets things right! Nice job!

Whatever the report says, you should only be allowed to express “disappointment” if YOU , personally, had a higher revenue growth year over year. Or for instance, how is the revenue at Forbes? Profit margins? Yeah…thought so.

Enter Your CommentHey everyone I want you to check out this Report about Apple. I feel like this guy hits it right on the spot. Where they are going wrong and what they should do next. He has some good insight on why the company is falling and what will bring it back to the top.